How Architects and Property Developers can work better together.
One of my favourite parts of property development is working with some of the world's most creative people. Architects, engineers, transport consultants are very skilled at solving complex problems. I often find that as a development manager, you will always learn something new from every single interaction with someone in your design team.
In practice, I think a few areas can be improved on whist working with architects, making a development manager life so much easier when needing to dictate a project's direction on behalf of her or his organisation.
Perhaps an architect can respond to this article to find ways to work better to achieve our shared goals.
Property development emphasises well-considered design and how this responds to the local characteristics within a particular area. Architects are skilled in finding ways to meet the challenge and design a project which is in keeping with a local area.
At the beginning of a project, especially at RIBA stage 1, I like to see various design options for a particular site with the associated accommodation schedules to run initial development appraisals on which type of scheme will be viable from a profitability perspective. The beauty of options is that it allows the development manager to meet with their internal teams to see which options work best. The appointed planning consultant will explore options with the planning department during pre-application meetings.
I am a firm believer in sound design, but the developer in me always thinks" At What Cost". The type of design initiative that excites me is delivering more homes and using tried and tested approaches to minimise the build costs. Design features that are expensive, such as double brick reveals, fanciful building shapes that require bespoke building solutions and large circulation spaces can be the difference between a viable and unviable scheme.
A wise man once told me that when you look at design/ costs, anything that looks abnormal to what you have seen in most buildings is likely to cost you more to build. This is why some developers build their schemes following what their established supply chains can provide. For instance, if you are a developer and your suppliers can get a specific type/ colour of brick for a competitive price, why would you specify anything different in your design?
Setting clear cost parameters for each essential part of a building at the start of the design process and measuring this during the design development helps track the cost implications.
I have found that development managers are always shocked at the tender returns from building contractors after planning permission is secured throughout my career. Who is to blame for this?
Objectively, I would say that the responsibility lies with the development manager, the architect and the acting quantity surveyor. The development manager is partly to blame because the project in question is ultimately their responsibility. With the architect, they should have used their past experiences to come up with a cost-effective design. Finally, the quantity surveyor should be challenging the client's design solutions and decisions to keep costs within a budget.
I have questioned whether an architect can genuinely design with a clear budget in mind whilst working with the client and broader project team to achieve this aim.
PDF versus excel
An Architect's best friend should be... AutoCAD first and then Excel. I have received accommodation schedules in PDF when I need it in excel. There have been times when number do not add up when I have moved the data from PDF's into excel.
Architects must provide us with excel schedules for anything relating to areas and number of units to ensure the numbers add up.
Depending on the client, involvement is something that needs to be established.
Designers should always gauge whether they have an engaged client or a hands-off client and adjust their working relationship accordingly. As a development manager, I love being as hands-on as possible while working on development projects with architects. My close involvement means I can be continuously involved and try to resolve issues from a client point of view. I also like to make sure that I do not see any elaborate structure which will cost a fortune to build. Plus, working with architects is fun, and their creativity makes me question how I could be creative in my thinking and problem-solving. For all the architects that have worked with me, the cat is now out of the bag.
Planning design to technical design
There is always a disparity between planning and technical design drawings used to build. It would be Godsend to work with a practice that considers the technical design at the planning stage. What this does is front-load the resolution of technical issues with the design. I have experienced issues with communal bins not meeting drag distances, therefore not meeting building control requirement. This then means that a redesign had to take place to ensure it met the building regulation requirements. Other issues were homes did not meet space standards, elaborate lobby areas and luxurious landscaped areas requiring redesign at the technical design stage. Any redesign of a consented scheme equals extra costs to the developer, impacting the profit and may mean going back to planning which causes project delays.
The butterfly effect comes to mind, which my older brother taught me about. A small flicker of a butterfly's wings today may turn into tornado tomorrow elsewhere. It is better to resolve design matters when they are small and easily resolvable; hence why design needs to be thorough at the planning stage.
There are three main ratios used to monitor space efficiency, which ultimately impacts the build cost and the development value. Ratios should be continuously checked to ensure that design is not inefficient, therefore increasing build costs. The primary ratio's used to measure the efficiency of a design is Wall to floor, Net to gross ratios or Wall to window ratios.
Wall to floor ratio is a good measure as it looks at dividing the external wall area by the Gross internal area. This is quite important as external walls can take up a significant portion of build costs, and having a high ratio number could mean you are spending more money on things that may not bring you back money. Typically 0.6-0.7 is considered efficient.
Net to gross is probably the most popular measure used in residential development. It is calculated by the Net Internal Area ("NIA") divided by GIA to give you a percentage. The GIA in an apartment block includes lobbies, hallways, bin stores, riser cupboard, lifts etc. The GIA of an overall building does not directly bring value to a scheme whereas the Net Internal Area of individual units does. A high Net to gross of say 80% means only 20% of the area is not bring you money as a developer. Whereas if the efficiency is 50%, you practically kissed away an additional 15-30% of the value that could have increased the overall value of your scheme. Typically developer aim to deliver 80% net to gross.
Finally, Wall to window ratio is the percentage area measure which is calculated by
dividing the total glazed area by the external wall area. An efficient building from a developers point of view is 75%. The amount of window space in a development impacts daylight, energy performance and ventilation. The more window space, the higher the likelihood the build cost will increase for the developer, and the cost of operating the building may be more expensive for the end-user. Buildings with low Wall to window ratio typically look like the glass scrapers in central London/ Dubai, but low ratio typically equals high costs for bespoke window systems. The cascading effect of low ratios is a more complex Mechanical & Electrical design to ensure that the building can retain heat, cool down and minimise the impact of solar glare.
All these ratios help keep design efficiencies in constant check, which means us developers can focus on what matters: providing more homes for the people than need it whilst doing so cost-effectively. In other words, spending our money on what brings back more money.
A change must come
I have spoken to a few developer friends, and their view was very similar to mine. The key points were:
Architects to think about the labour and material market when carrying out design. This ensures that they understand the cost implications of design in more detail.
Architects to have a good idea of the profitability in property development. A design may look pretty, but it will not be built if it doesn't make money. A wise man once said, "for every 20p (20% profit) in the £1". This means profitability should be on everyone's mind in a project and you should look to make 20p for every pound spent.
Architects should work closely with the appointed quantity surveyor to ensure that build cost is always at the forefront of everyone's mind. This tag-team working closely together can save a developer many heartaches. Quantity surveyors can help with market testing, up to date rates of materials, and a steer on costs from other similar projects. The client/ property developer should promote this relationship between the quantity surveyor and the architect.
Looking at the Man or Woman in the Mirror (Development Managers)
Establishing a clear brief is so essential for the architects to design a scheme that meets our objectives. Sometimes, development managers do not set clear, which creates a cocktail for failure. It is vital that development managers to provide a clear brief whilst setting out expected ratio targets that must be met.
At my time in Countryside, they were excellent at carrying out design reviews with their internal teams ( DM, technical, commercial, sales and estimators) to scrutinise design and challenge proposals were necessary. The result was a rationalised design that fits in with their companies objectives and cost parameters. This is something I hope to adopt wherever I go professionally.
The value in property development is in all stakeholder understanding each parties point of view. It is fantastic when an architect help clients secure planning permission for a unique award-winning design, but what happens when it is too expensive to build.
Private developers' motivation is to make a profit because they will not be in business without it. Architects should ensure that design ultimately maximises profit. The motivation isn't always profit for the public sector, but they need an efficient design to get build costs down, deliver more homes, and end up with the operational surplus.
I think that architecture schools should consider including elements of development appraisals and quantity surveying in their courses. This will help future designers in understanding the motivations dictating their client's instructions.
For the qualified architects, it will be good for them to consider shadowing development managers to get a snapshot of development appraisals so that the impact of design on costs are clearly understood. Any architects wanting to get in touch to discuss how this can happen, let's talk.
Finally, I would like to say a special thanks to Ayo Ajayi (Colliers International), Alex Cook (Countryside Properties), Nii Klotey Quaye (Quaye Services) and Rowan Stewart (Featherstone Homes Ltd) for the input into this article